The Globe and Mail reports in its Tuesday edition that a group of investors says Ontario's mortgage regulator bears some of the blame for losses linked to investments in Fortress Real Developments and is calling on the provincial government to pay restitution.
The Globe's Janet McFarland writes that Toronto lawyer David Franklin, who has been representing a group of investors that have not been repaid money invested in Fortress syndicated mortgages, said the investors want the province to help them because its mortgage regulator, the Financial Services Commission of Ontario, took far too long to act on years of complaints about mortgage investments. He said the group is also contemplating legal action against FSCO if it cannot recover their money. Mr. Franklin believes that FSCO was negligent in this case because it failed to act on many signs of problems with the sale of syndicated mortgages.
"People have been defrauded -- these are their life savings," Mr. Franklin alleged. "They are saying that if FSCO had done its job, this wouldn't have happened."
FSCO has defended its work, saying it investigated complaints it received and issued repeated warnings on its website about the risks of syndicated mortgages.
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